Taiwan's Asus plans big push in India

Asus plans to double local production to 600,000 smartphones this year, made by contract manufacturer Foxconn in Andhra Pradesh.Gulveen Aulakh | ET Bureau | April 20, 2016, 21:03 IST

Taiwan’s Asus, the world’s fifth largest personal computer maker, plans to make India its home market for smartphones, and is stitching together aggressive growth plans which involves doubling local production and spending on marketing in an effort to be a top five player.

Asus plans to double local production to 600,000 smartphones this year, made by contract manufacturer Foxconn in Andhra Pradesh, while more smartphone launches in the sub-Rs 6,000 and above Rs 20,000 price brackets will follow.

“Internally, we're thinking we should make India as our home base, especially in smartphones,” Peter Chang, Regional Head for South Asia and India country manager told ET, underlining the criticality of the South Asian nation - the world’s fastest growing smartphone market - to global operations.

“Vivo and Oppo have a big home base, they can take from home and invest in India. For us, it’s difficult to compete the same way… we have no way back,” Chang added, comparing the company to Chinese players that have a massive home market to fall back on in case they don’t succeed in India or if they need money to invest for creating their brand locally.

Chinese players including Vivo, Oppo and Le Eco have spent Rs 80 crore, Rs 100 crore and Rs 70 crore, respectively on advertisements from January to March this year, and the year has just begun. Asus, on the other hand, had said that it would invest Rs 34 crore in marketing its Make in India foray, last October.

Given the intense competition in the Indian smartphone market, which is the fastest growing market worldwide, and the sheer number of Chinese players coming into India over 2015, Asus’ marketing efforts went unnoticed.

"We would be doubling our marketing budget this year, from 2-3% of revenue, because we want to have 5% market share," Chang said. "Asus Corporate will support some extra funding on top of our profit and loss, to increase our marketing."

At 6% of Asus India’s revenue target of $200 million (Rs 1,330 crore) for 2016, marketing budgeting could be around Rs 80 crore, which may still be far behind yearly budgets of its Chinese competitors.

With about 600,000 units sold in January to March period, Chang said that the company has survived so far, claiming to corner 2.3% market share, as per its internal estimates. It plans to up the ante by doubling local production from 300,000 units, and thereby increasing local sales.

Chang added that rather than expanding number of retail stores, or taking the single brand retail route, it wants to get more sales from its existing 120 stores in India.

The company that sells smartphones, tablets, laptops and personal computers, also launched its gaming laptops and desktops on Wednesday.

It will also expand its offline presence through 100 shop-in-shop stores in multi-brand outlets, besides two exclusive stores, housing the gaming products priced between Rs 86,000 and Rs 3.2 lakh.